Minimum Value Calculator

Minimum Value Calculator

DEPARTMENT OF HEALTH AND HUMAN SERVICES CENTERS for MEDICARE & MEDICAID SERVICES

Center for Consumer Information and Insurance Oversight

Purpose

? The purpose of this webinar is to demonstrate the minimum value (MV) calculator and provide users with an introduction to the calculator.

? We will begin with an overview of MV, followed by a brief demonstration of the calculator and end with a question and answer session.

? Discussion in this webinar will reflect HHS' finalized policy to implement section 1302(d)(2)(C) of the Affordable Care Act.

? We have developed the MV Calculator based on the parameters and standards HHS finalized in the EHB Final Rule.

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Minimum Value Background

? Minimum Value (MV) is the percentage of the total allowed costs of benefits provided under a group health plan or health insurance coverage, so long as that percentage is no less than 60%.

? MV determines whether an individual, who is eligible for affordable employer-sponsored group health plan coverage, may receive a premium tax credit.

? MV is determined based on a standard population that is based on claims data from self-insured group health plans.

? On May 14, 2012 Treasury released an MV Notice outlining the main methodologies for determining that a given plan provides MV. Based on the MV Notice and section 1302(d)(2) of the ACA, HHS finalized the standards for determining MV.

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Approach to MV Calculation

? On February 25, 2013, HHS published the EHB Final Rule that included the methods for determining MV.

? HHS finalized that a group health plan may determine MV using one of the following: ? MV Calculator ? Any safe harbor established by HHS and IRS ? Certification by an actuary if neither option above is suitable

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Basics of the MV Calculator

? The MV calculator is a publically available tool1. ? The MV calculator includes a limited number of inputs

(deductibles and co-pay/coinsurance on many major services).

1 Including logic and continuance tables

Development of the MV Calculator

? The MV calculator was developed based on HHS's regulatory approach to actuarial value (AV); however, the MV Calculator uses a different standard population and continuance tables.

? Starting with the claims data, HHS developed continuance tables2 which are the "drivers" of the MV calculator.

? Additional inputs specific to the determination of MV were added to the MV Calculator.

2 Continuance tables are distributions of annual paid claims arranged to show the amount of claims paid at each increasing level of expenditure, adding up to the total expenditures of a covered group of enrollees.

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MV Calculator Design

? Objective: Take major cost-sharing features of a plan benefit design and translate into actuarial value and metal tier

? Major cost sharing features: Deductibles, coinsurance, copayments, and maximum out-of-pocket (MOOP)

? Standard population data: Continuance tables representing distribution of annual paid claims for a covered group of enrollees

? Methods: Percentage of allowed charges covered by an issuer (Innetwork only)

? Numerator: Plan-covered expenditures using cost-sharing features ? Denominator: Average allowed costs for covered benefits

Standard Population Data

? HHS used a large collection of claims data from the self-insured employer plan markets across many states. ? Starting point to be representative of 2014 Exchange market and 2014 claims ? Adjustments made to more fully represent expected average employer population

? Continuance tables summarize distribution of annual claims experience for standard population ? Show amount of claims at increasing levels of expenditures

? A more detailed methodology is available on the CCIIO website and the tables themselves are available with the calculator.

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